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Management · Q399

Financial Management

Graduate and Post Graduate · Management · question 399

Q399

Cost of common stock is 16% and bond yield is 9% then bond risk premium would be

A.
7.00%
Answer
B.
9.00%
C.
1.78%
D.
25.00%

Answer: Option A

Solution

Answer: Option A
Solution:
Bond risk premium = Cost of common stock - Bond Yeild
= 16% - 9% = 7%.
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